Microsoft said Friday it has inked a "cooperation agreement" with ValueAct Capital, a San Francisco-based investment firm that owns about 0.8 percent of Microsoft's outstanding shares and reportedly has been gunning for a seat on its board of directors.

Under terms of the agreement, Microsoft will give ValueAct Capital President Mason Morfit the option of joining its board of directors at the first quarterly board meeting after its annual shareholders meeting, which takes place Nov. 19. In other words, early 2014.

Morfit also will meet regularly with Microsoft directors and management to "discuss a range of significant business issues," the software giant said in a press release.

"Our board and management team are committed to enhancing growth and value for Microsoft shareholders, and we look forward to ValueAct Capital's input," outgoing Microsoft CEO Steve Ballmer said in a statement.

Last month, Reuters reported that Microsoft's biggest institutional investors had expressed concerns to ValueAct Capital about the company's lack of a CEO succession plan. ValueAct Capital also opposes Microsoft's entry to the hardware market with Surface tablets, according to the report.

Rick Sherlund, an analyst at Nomura Securities, toldThe New York Times the agreement will allow Microsoft to avoid a potential proxy battle with ValueAct Capital and other investors intent on getting a seat on Microsoft's board.

Ballmer last week revealed his plan to step down as CEO within the next 12 months. But he told The Seattle Times that his decision had nothing to do with pressure brought by ValueAct.

"My retirement has nothing to do with that," Ballmer toldThe Seattle Times. "My retirement has everything to do with what I think is the right long-term timing for Microsoft."

Microsoft shares soared more than 7 percent after the announcement that Ballmer would be leaving, topping $35 per share and at one point adding more than $16 billion to the company’s market capitalization.

But investors' euphoria has subsided since then. Microsoft shares closed Friday trading at $33.40, or about 3.5 percent higher than they were before the Ballmer announcement.